German trade surplus hits record high

Germany’s trade surplus hit an all time high last year as the country continued to export significantly more than it imported.

According to the figures, German exports climbed 1.2% to 1.2 trillion euros in 2016, while imports rose 0.6% to 954.6bn euros.

This left a surplus of 252.9bn euros, up from 244.3bn euros in 2015.

It comes days after Donald Trump’s top trade advisor accused Germany of exploiting the euro to boost exports.

In an interview with the Financial Times last week, Peter Navarro alleged the euro was a German currency in disguise, and this gave Germany an unfair advantage over the US and other nations.

A low currency makes goods cheaper to sell abroad.

Image copyrightUNIVERSITY OF CALIFORNIA, IRVINE

Image caption
Peter Navarro, Donald Trump’s top trade adviser, said the euro was a German currency in disguise.

German Chancellor Angela Merkel rejected the claims, however, stressing it always been her country’s policy that the European Central Bank should pursue an independent monetary policy.

The German Finance Minister Wolfgang Schaeuble has said that the euro was in fact too weak for Germany.

“The reality is the euro is priced at a level that is a weighted average of all euro zone countries and that will always mean that for some countries that is a too competitive rate leading to a trade surplus and that is certainly the case with Germany.”

More generally, Germany says it has tried to boost its levels of domestic demand – and thus boost imports – to offset its large trade surpluses.

Measures include introducing a national minimum wage in 2015 and increasing state spending on infrastructure, pensions and digital infrastructure.